Strategic Management Report: Apple Inc. Strategy Formulation

This report provides a comprehensive analysis of Apple Inc.'s strategic management processes, including both formulation and implementation. It begins with an executive summary and table of contents, followed by an introduction to the company. The report delves into the strategy formulation process, covering vision, mission, SWOT analysis, and Porter's Five Forces. It then explores the strategy implementation process, focusing on cost leadership, differentiation, and integration strategies. Furthermore, the report examines the role of strategic human resource management, including recruitment, selection, and challenges. The analysis includes environmental scanning, resources, and the company's relationships with employees, customers, and corporate social responsibility. The report provides insights into Apple's competitive advantages and future challenges, offering a detailed overview of the company's strategic approaches and their impact on its success.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Executive Summary
The report has helped in the entire analysis of the strategic formulation and strategic
implementation process at Apple Inc Company. The different kinds of internal and external
analysis have been conducted which helped in providing details on the success of the company.
Furthermore, the analysis of the role of the human resource department has been identified which
helped in gaining knowledge on the different challenges which can be faced by Apple in the
entire future.
Moreover, the different relationships have been described with the employees and the customers
in the market. The resources capabilities have been analyzed which helped in gaining huge
competitive advantage. Lastly, the recruitment and selection procedure at Apple have been
identified which assisted in analyzing the issues and the advantages of the process and the
difference from other competitors.

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Table of Contents
1.1 Introduction...........................................................................................................................3
1.2 Strategy Formulation Process...............................................................................................3
1.3 Strategy Implementation Process.........................................................................................6
1.3.1 Role of strategic human resource management.............................................................9
1.3.2 Human Resource Management Policy and Procedure................................................10
1.3.3 Staff Recruiting and Selection.....................................................................................11
1.4 Challenges for Human Recourse Management in the future...................................................11
1.4.1 Relationship with employees............................................................................................12
1.4.2 Relationship with customers.............................................................................................13
1.4.3 Corporate social responsibility.........................................................................................13
1.4.4 Sustainable human progress.............................................................................................14
1.5 Resources.................................................................................................................................15
References......................................................................................................................................16

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1.1 Introduction
Apple Inc Company is one of the American multinational technology organizations
which are being headquartered in Cupertino, California. The company is specializes in
designing, developing and selling consumer electronics, computer software along with different
kinds of online services. The number of stores which is situated in various countries is inclusive
of more than 500 and the area served by the company is worldwide. Lastly, the revenue which is
being earned by the Apple Inc Company is US$229.234 billion (Apple 2018).
1.2 Strategy Formulation Process
The formulation of the strategy process is inclusive of vision, mission, SWOT and
Porter’s Five Forces Analysis of Apple Inc Company.
Vision and Mission
The mission of Apple Inc Company is to develop the world’s best computers along with
mobile phones. Apple leads digital music revolution with different iTunes and iPods online store.
The vision of the Apple Inc Organization is innovation of the different products which
are being sold by them in order to compete in the entire market which is competitive in nature.
The vision statement includes various details of strategic management.
SWOT Analysis
With the help of SWOT analysis, the internal factors can be analyzed which can be
helpful in the formulation of the strategy for Apple Inc which is being described as follows:
Strengths

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 The company has huge base of clients wherein they are serving more than 200 countries
around the world and this helps them in gaining huge share in the market
 Apple is one of the most valuable manufacturer of the personal computers along with
smart phones and this has helped them in strengthening their brand image as well
 Apple has highly committed and trained staffs wherein the company have huge strength
in the human resources to implement the different policies (Armstrong et al. 2015)
Weaknesses
 The high prices of the different products which are being sold by Apple has locked out a
huge portion of the individuals in the entire competitive market and this is weakness in
the marketing strategy
 The different products of the company are incompatible with the other devices which is
difficult for the different customers in the market to switch to Apple products from the
other mobile phones
Opportunities
 The different global operations of Apple has opened different kinds of opportunities to
open new stores in the entire world
 The demand for the different smart phones along with other tablets have increased and
this is enlarging the share in the market as well
Threats
 There is fierce amount of competition in the entire market and the main competitors of
Apple includes Samsung and Nokia which are entering the market with similar kind of
products to attract the different customer base

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 The different kinds of fluctuations in the market can threaten the entire financial survival
of Apple and this is difficult for them to plan for future
Environmental Audit
Furthermore, this is essential to carry out the environmental audit for Apple Inc Company
as this will help in providing a detailed analysis on the different competitors and threats which
can affect the overall reputation of the company.
Competition Rivalry with Apple is strong force as this has been seen that:
 High level of aggressiveness of the firms is the strong force
 Low cost of switching is the strong force
Bargaining power of the buyers is the strong force wherein:
 Low switching costs is strong force
 Small size of the different individual buyers is the weak force
Bargaining power of Suppliers is the weak force which is inclusive of:
 High number of suppliers is the weak force
 The overall high supply is the other weak force
Threat of the substitutes is the weak force which is inclusive of:
 The high availability of the substitutes is the moderate force
 The low performance of the different substitutes is the weak force
Threat of new entrants is moderate force wherein:
 High requirements of the capital is weak force

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 High cost of the development of the brand is the weak force
1.3 Strategy Implementation Process
In order to implement a strategy for Apple Inc, there are three major points which can be
taken into consideration which are described as follows:
 Cost Leadership Strategy
 Differentiation Strategy
 Integration Strategy
Firstly, all the strategies are required to be analyzed as per the different merits and
demerits as this will assist in managing the different kinds of issues in an efficient manner. In the
cost leadership strategy, this helps in establishing competitive advantage and in other means this
is the lowest cost strategy operation in the industry. Apple Inc uses the cost leadership strategy
by drawing different kinds of policies along with different strategies which aims in ensuring that
the organization has lowest cost producer along with the distributor in the entire market.
Cost Leadership Strategy
Advantages
 This helps in gaining high profitability by selling the different products at competitive
pricing and keep greater amount of margins in comparison to the different competitors
 This will increase the overall market share of the company and satisfying the different
needs of the customers in the market
Disadvantages

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On the other hand, there are few disadvantages which can be faced by Apple Inc which is
inclusive of the following:
 Apple Inc needs to lower the cost of few of the services and this can lead to loss of
loyalty among the different customers
 There will be lack of innovation which will negatively impact the customers for updated
technologies (Collings, Wood and Szamosi 2018)
Differentiation Strategy separating
In the year 1980, Apple Inc tried to implement the differentiation strategy as this helped
them in separating their products in the market from the other competitors. They started
introducing different kinds of products such as Mac Book along with iPhone and iPad.
The four differentiation strategies which are being used by Apple in the market in the entire
worldwide are inclusive of the following:
 Product Design is the major aspect of the differentiation strategy which have been
adopted by Apple Inc in a positive manner in comparison to the different kinds of
competitors in the market. Apple has tried to introduce the design of the product of the
product differentiation strategy wherein they introduced iPad, iPhone and iPod which was
totally different from the other competitors in the market.
 Pricing strategy which was adopted by Apple Inc is completely different from other
competitors in the market wherein Steve Jobs created topnotch products with
proportionate kind of pricing which matched the quality of the product which was being
sold by Apple.

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 The brand loyalty is the other aspect which helps Apple in differentiating themselves
from the other competitors in the market which is inclusive of different iTunes and other
TV shows which could have been watched by the customers on their Apple products. `
Integration Strategy
The competition with Apple Inc Company is difficult as the technology which is being by
Apple is unique and high tech in nature which makes it difficult for the other competitors in the
market. Apple builds great kind of hardware and tries to optimizes their software for the
hardware and equips the same with web services as well which helps in controlling the selling
experience of the own retail stores (Vivares-Vergara et al. 2014).
Environmental Scanning
Proper environmental analysis is essential in nature which helps Apple Inc in gaining
information to serve the tactical kind of strategies. The categories which are required to be
considered in environmental scanning are inclusive of the following:
 Social Forces is inclusive of the social conditions which will be inclusive of the different
kinds of aspects such as GDP of the country.
 Demographic Forces is inclusive of the different kinds of young generation people who
are the main targets of the Apple.
 Economic Forces is the other aspect in which purchasing power of the different
customers relies on the economic conditions which will help Apple in gaining
competitive advantage (Brewster, Chung and Sparrow 2016).

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 Technological Forces is the aspect in which apple is successful in the entire world as they
are huge and expert in innovation
 Political Forces is inclusive of terrorism and health issues which can affect the growth of
Apple Inc.
 Legal Forces is inclusive of the legal obligations that can affect the growth of Apple Inc
Company.
 Competitive Forces is the aspect in which there is huge competition in the entire market
and major competitors is inclusive of Samsung, Nokia and HTC. However, the ability of
Apple Inc has helped them in becoming the best in the market (Albrecht et al. 2015)
Furthermore, Steve Jobs in Apple uses the environmental scanning as to gain business
intelligence by tracking their customers and the usage of the products in a systematic manner.
This helps in allowing the people in obtaining information from the system feedback as to
analyze the adjustments which are required in the quality to the strategies of marketing (Luthans
et al. 2015). The preset world is technologically advanced and in order to gain competitive
advantage in the rapidly changing environment, Apple seems to have the formula for success and
this kind of implementation of strategies has helped Apple in becoming successful in the
different kinds of approaches.
1.3.1 Role of strategic human resource management
The human resources are the driving forces towards the development strategy of the
organization which will help in managing the different activities effectually. In Apple Inc.
Company the major departments and the people who are working are technical, marketing and
staff positions (Kleinaltenkamp, Plinke and Geiger 2016). The main purpose of Apple is

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attracting and retaining the different talents and this helps the company in becoming more
competitive in nature.
 Recruitment and Selection of Candidates is the first aspect as Apple has put into huge
amount in the process of recruitment and objective is to gain the right candidates for the
company (Keller and Kotler 2016).
 Diversity along with equal employment opportunities is the aspect in which Apple
provides equal kind of opportunities to the different individuals working in the
organization which will help in attracting and retaining the talented individuals
(Hutchinson et al. 2015).
 Appreciation and recognition of employees is the other aspect wherein Apple Fellows
Program which was created in 1995 to recognize the people that make an unusual
involvement to the organization. This strategy helps and motivates the different
employees as this is the economic benefit (Foxall 2014).
1.3.2 Human Resource Management Policy and Procedure
There are various types of human resource policies and procedures which are being
followed by Apple Inc Company are inclusive of the following:
 There are different compliances which are being maintained in Apple which is inclusive
of safety and healthy workplace which is being provided to the employees in the
organization (Di Benedetto, C. A., and Lindgreen 2018)
 There are career opportunities which is applied in Apple Inc which is inclusive of the
different kinds of opportunities provided to the employees such as promotional activities
which help the company in becoming more effective (Chernev 2018)

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 The recruitment policy of Apple Inc is the other aspect which is being followed as the
main aim of Apple is that the candidates needs to fit with the organizational culture and
this will improve the productivity of the organization appropriately (Charter 2017)
1.3.3 Staff Recruiting and Selection
The recruitment and selection of the different candidates in the organization are the keys
to success of Apple Inc. Furthermore, Apple tried to invest a lot of amount of recruitment and
selection with the main objective of selecting the suitable candidates who can settle with the
culture of the organization in an effective manner. Apple requires different employees who are
dedicated towards the tasks and hard working in nature (Bresler and Lubbe 2014).
The recruitment strategy which is being used at Apple varies from the other employers as
in Apple; the company does not assure the employees for the future succession of career. The
employees in the organization are required to own their career and in this respective case; Apple
does not maintain the career path. On the other hand, the process of selection is based on the
vocal interviews and this enables them to select the right candidates for the different positions in
the organization appropriately (Chambers and Humble 2017).
1.4 Challenges for Human Recourse Management in the future
There are different kinds of challenges which can be faced by the HRM department of
Apple Inc Company in the future which is inclusive of the following:
Firstly, there can be a problem with the compliance which can be faced by Apple in the
future. The company is unethical towards the employees as there is no bonus or overtime which
is being paid to the employees and this can affect the overall productivity of the organization.